PwC recently agreed to settle the Campbell v. PwC overtime class action lawsuit pending in California. Two former unlicensed PwC accounting associates, with the support of law firm Kershaw, Cutter & Ratinoff, filed a motion on October 24, 2007 that sought to certify a class of all associates and senior associates employed by PwC in California.

The accounting profession wants to be elite, like law, even though the public accounting business model at the largest firms is built on the volume of recruits and expects a high turnover in the first few years. Heck, the auditor overtime class actions show that more than fifty percent of their class members leave the firms within the first five years. The class action members also say that exam failure rates are high and that the firms are not that concerned about repeat failures.

That will have to change.

I predict the largest public accounting firms will mandate a Masters Degree in Accounting to be hired and disqualify anyone with only an undergraduate degree, whether or not they have the required 150 credit hours. The largest public accounting firms will expect passing grades on all parts of the new bar-exam style CPA exam before a full-time start. In addition to passing the exam, most jurisdictions also require between 1–2 years of experience doing audits on the job in a public accounting firm to be licensed as a CPA. If graduates start full-time employment with the exam already nailed, within 1–2 years, depending on state law, everyone is licensed. (I wouldn’t be surprised if the firms start lobbying to reduce experience requirements on the strength of their significant, quality ongoing in-house training programs that meet continuing professional education requirements to remain licensed now.)

When all this is in place, the largest public accounting firms will have closed the window on vulnerability to any new class action overtime lawsuits brought by entry level auditors.

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Francine McKenna (@retheauditors) is the Transparency Reporter at MarketWatch.com, a Dow Jones publication, where her work is also featured frequently in the Wall Street Journal. McKenna had more than twenty-five years of experience in consulting and professional services including tenure at two Big 4 firms, both in the US and abroad before becoming a journalist. Look for her prior columns, "Accounting Watchdog" at Forbes.com and "Accountable" at American Banker. For more information, click "About" at the bottom of this page. For more information contact Francine McKenna, fmckenna@mckennapartners.com